Correlation Between Oxford Bank and CNB
Can any of the company-specific risk be diversified away by investing in both Oxford Bank and CNB at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Oxford Bank and CNB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Bank and CNB Corporation, you can compare the effects of market volatilities on Oxford Bank and CNB and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Oxford Bank with a short position of CNB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Bank and CNB.
Diversification Opportunities for Oxford Bank and CNB
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oxford and CNB is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Bank and CNB Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNB Corporation and Oxford Bank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Oxford Bank are associated (or correlated) with CNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNB Corporation has no effect on the direction of Oxford Bank i.e., Oxford Bank and CNB go up and down completely randomly.
Pair Corralation between Oxford Bank and CNB
Given the investment horizon of 90 days Oxford Bank is expected to generate 1.01 times more return on investment than CNB. However, Oxford Bank is 1.01 times more volatile than CNB Corporation. It trades about 0.12 of its potential returns per unit of risk. CNB Corporation is currently generating about -0.27 per unit of risk. If you would invest 3,250 in Oxford Bank on August 29, 2024 and sell it today you would earn a total of 100.00 from holding Oxford Bank or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Bank vs. CNB Corp.
Performance |
| Timeline |
| Oxford Bank |
| CNB Corporation |
Oxford Bank and CNB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Bank and CNB
The main advantage of trading using opposite Oxford Bank and CNB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Bank position performs unexpectedly, CNB can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CNB will offset losses from the drop in CNB's long position.The idea behind Oxford Bank and CNB Corporation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CNB vs. Israel Discount Bank | CNB vs. Baraboo Bancorporation | CNB vs. Danske Bank AS | CNB vs. Jyske Bank AS |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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